- NZD/USD rallied on Friday where the greenback continued to sell-off due to Powell’s neutral comments.
- Powell’s reiteration that rate rises would remain gradual gave the green light to ongoing falls in the USD and increases in equities on Friday.
NZD/USD has started out in early Asia within familiar grounds to Friday’s North American session, capped in the open at 0.6696, matching Friday’s high after a dovish undertone that came from Powell’s address at the Jackson Hole. For the day ahead, liquidity will be thin with London out for Bank Holiday and data from around the street is also relatively scant.
Global market wrap: a ‘neutral’ Powell speech, dollar heavy – ANZ
“We mentioned last week that we were not convinced that broad USD strength would persist, and we have a little more confidence in that view following Powell’s more ‘neutral’ comments. That doesn’t make us bullish on the NZD; it’s just that the path lower over the medium term will be more measured,”
analysts at ANZ Bank New Zealand Limited (“ANZ”) argued.
Dovish undertones from Powell at Jackson Hole – TDS
NZD/USD levels
With a chunky continuation candle for Friday’s close, the upside is favoured although the readings are more neutral on the whole. The Weekly 10 SMA is the first key target – located at 0.6734 and if broken, it will be the first time the price has traded above it since mid-April earlier this year. To the downside, support is located at 0.6630, while otherwise, the bull’s target in the medium term should be the 200-month moving average resistance at 0.7019.
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